LONDON, Oct 10 (Reuters) - Germany's 10-year bond yield was little changed on Monday after blasts rocked the Ukrainian capital Kyiv and other Ukrainian cities, with investors remaining focused on global central banks and the pace of monetary tightening.
Large explosions shook Kyiv and other cities on Monday morning in apparent Russian revenge strikes after President Vladimir Putin declared an explosion on the bridge to Crimea to be a terrorist attack.
Weak services data from China, renewed COVID concerns in the country and a set of new export controls introduced by the Biden administration, including a measure to cut off China from certain semiconductor chips, were also weighing on sentiment, said Mizuho rates strategist Evelyne Gomez-Liechti.
"The Crimean bridge and the explosions really didn't fit well with risk sentiment," Gomez-Liechti said.
"Those are the drivers that have probably hurt sentiment and are driving some strength in the bond markets."
By 1059 GMT Germany's 10-year bond yield, the euro area's benchmark, was flat at 2.196%. It had earlier been down as much as 5 basis points (bps). Bond yields move inversely to prices.
Germany's two-year yield, more sensitive to changes in interest rate expectations, was down 6 bps at 1.80%.
U.S. government bond markets are closed on Monday for the Columbus Day holiday.
Euro zone bond yields had jumped on Friday after strong U.S. jobs data dampened expectations that the Federal Reserve will slow the pace of interest rate hikes.
"The accelerating sell-off on Friday underscores how data-sensitive the market remains," Commerzbank rates strategist Rainer Guntermann said in a note.
Guntermann highlighted that the unemployment rate declined to a record low, which provides "no evidence for the Fed to slacken the fight against inflation".
Investors were bracing for key U.S. inflation data on Thursday for clues on the size of the next Fed rate decision next month.
"I think the bar is very high if you want to see the Fed doing anything less than (an increase of) 75 basis points," Mizuho's Gomez-Liechti added.
Money markets are pricing in around a 90% chance of a fourth consecutive 75 bps increase at the November meeting, Refinitiv data shows.
European Central Bank (ECB) officials have affirmed their commitment to take inflation back down to target, even in the face of a slowing economy.
Bank of France Governor Francois Villeroy de Galhau on Monday said the ECB is engaged in bringing down inflation to 2% in two to three years while Dutch policymaker Klaas Knot signalled that a large rate hike was coming at the ECB's next meeting.
Among euro zone bond sales, the European Union has mandated banks for a 20-year benchmark bond and a tap of its December 2029 bond, scheduled to be launched tomorrow, according to a memo seen by Reuters.
Germany hired banks for a syndicated 30-year bond sale, according to memos from two lead managers seen by Reuters.
In Britain, the Bank of England announced safety net measures including a doubling of the maximum size of its debt buybacks to ease concerns about the expiry of its programme to calm turmoil in bond markets.
Britain's 10-year gilt yield was up 9 bps at 4.323% (Reporting by Samuel Indyk Additional reporting by Yoruk Bahceli Editing by Ed Osmond and David Goodman)
